Watching this “flabbergasting” week unfold on Wall Street, says John Gapper in Financial Times, was a study in moods: excitement at all the action, bafflement, fear, and finally, with the AIG bailout, anger. AIG was doing quite well insuring “risks it knew well—car crashes and fires”—before it greedily jumped into CDOs and other “derivatives it did not understand.” Now it—and banks, and worse, we U.S. taxpayers—are paying the price. “The job of insurance companies is to guard others against catastrophes, not cause them.” And if a “renegade insurance company” can “blow up the world’s banks,” we might have to rethink our regulatory system. “Regulation cannot solve everything but enough is enough.”

The end of deregulation

Jimmy Carter started a 30-year period of deregulation with the 1978 Airline Deregulation Act, says Michael Mandel in BusinessWeek.com, and the Federal Reserve ended it Tuesday night, with the takeover of AIG. For 30 years, politicians of both parties competed to free the economy from “the oppressive yoke of government control,” with the rallying cry “Less regulation, more growth.” Not so much now. From food safety to, yes, airlines, “increased government supervision is becoming acceptable to business as well as to voters.” This was a big change even before Wall Street’s meltdown. Now, “the breakdown of the financial markets has left open the question of how much deregulation will be left when the dust settles.”